Corker Q&A: Future of consumer bureau with Obama

RonaldD. Orol

WASHINGTON (MarketWatch) — The ball is in the White House’s court when it comes to getting Richard Cordray approved to head a consumer bureau responsible for writing rules for mortgages and other financial services products.

That’s according to Sen. Bob Corker, Republican of Tennessee, who spoke with MarketWatch about an ongoing battle between Democrats and Republicans over the future of the Consumer Financial Protection Bureau and its chief.

Corker explained why he thinks the next step is with the Obama administration when it comes to Cordray’s approval and why he didn’t sign onto a recent Republican letter pledging to block Senate approval of any candidate to run the bureau until Democrats agree to restructure the agency.

Sen. Bob Corker

He also raised concerns with a system regulators are setting up to prevent bank bailouts.

Here’s what the senator, often seen as a broker between Democrats and Republicans, had to say.

MarketWatch: The Obama administration’s nominee, Cordray, will need some Republican votes to obtain the filibuster-proof 60 votes needed to be confirmed by the Senate to head the bureau. However, Republicans have been seeking to change it into a bipartisan commission made up of five members, instead of having one person in charge, as currently stipulated by law. Republicans also are upset that the bureau receives funds without the oversight of a congressional appropriations committee. Why did you not sign the Republican letter seeking to have the bureau restructured?

Corker: We’ve reached out to the White House and Treasury Department to make some suggestions about the bureau. I’ve reached out to some senators to share some conversations with executive branch officials we’ve had about this situation. I didn’t want to sign a partisan letter while I was making those calls.

Q: Are you able to reach a compromise on Capitol Hill to get Cordray’s approval?

A: With CFPB, this is not a solution that can come out of Congress. You have to have an administration that has to come to help. This will not be solved without the White House agreeing to make some changes. We’re not proposing legislation.This is not in our court. This is not a case where anybody is going to band people together to pass legislation unless the White House is willing to participate in this. There is no way any Democrat senator is going to agree to do this without support from the White House.

A: There could be a couple of other things we could do. I don’t want to make public some suggestions I have made. We’re not working on some master piece of legislation. You have to have a White House partner.

Q: Are there some examples where the administration has reached a deal with Republicans to help move a White House candidate forward?

A: We suggested some changes to the Federal Housing Administration and they incorporated those changes and if you remember, FHA chief Carol Gallante, was approved overwhelmingly by the Senate after they made some changes to strengthen its fund. The changes were made and she was confirmed overwhelmingly.

Q: During the build up to the Dodd-Frank Act, you worked with Sen. Mark Warner of Virginia to help include in the legislation the creation of an Office of Financial Research responsible for collecting financial data. Did it come out the way you wanted it to?

A: The Office of Financial Research ultimately was set up in a different way than we agreed to. We both thought that an office like that would be helpful. By the time it made it through the conference it looked very different than what we wanted.

Q: The two of you also produced a legislative proposal on creating a system to dismantle a large failing institution so that it doesn’t cause collateral damage to the markets. Did that turn out how you wanted?

A: The major problem with the way regulators are setting up the system to dismantle a failing big bank is that if you are a creditor to a subsidiary of a bank, you can end up not taking any losses. Therefore creditors will feel safer making loans at the subsidiary level and this creates an unfair situation. Some creditors will be treated better than others and that is not an appropriate scenario and this needs to be resolved.

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